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WISCONSIN INCOME TAX LAW
WITH EXPLANATORY NOTES
SECOND EDITION
issued by
WISCONSIN TAX COMMISSION
Madison, Wis.
December, 1913.
MADISON, WIS.
Democrat Printing Company, State Printer
1913
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SUMMARY OF CONTENTS
THE INCOME TAX LAW
Part I.
The Income Tax.
I. Explanatory provisions Page
II. Deductions allowed corporations 13
III. Deductions allowed individuals 17
IV. Exemptions 20
V. Rates 22
PART II.
Administration.
VI. Districts and assessors 26
VII. Assessments and returns 29
VIII. Appeal and review 34
IX. Apportionment and collection 37
X. Secrecy of Returns — County Supervisors of Assessment —
Personal property offset — Powers of Tax Commission... 43
PART III.
Duties of Assessors of Incomes in Connection with General Prop-
erty Taxation 45
Instructions to Individuals 47
Instructions to Corporations “ 50
Instructions to Guardians ™
PREFACE
This edition of the Wisconsin income tax law is designed to
assist taxpayers in an understanding of the law. Abstruse legal
discussions have consequently been avoided. Taxpayers desir-
ing information about the meaning of the law or the proper
method of reporting are advised to apply to the Tax Commission
or the nearest assessor of incomes. In the great majority of.
cases, it is unnecessary to consult lawyers or notaries, as it is
the desire of those administering the law to protect the interests
of taxpayers as well as those of the public.
Prior to the enactment of the income tax law the following
property was subject to assessment as personal property: (a)
moneys and credits; (b) stocks and bonds not otherwise spec-
ially provided for; (c) personal ornaments and jewelry habit-
ually worn; (d) household furnishings; (e) machinery, imple-
ments and tools used in farm, orchard or garden; (f) one watch
carried by the owner. By the provisions of the income tax law
this property was exempted, hence the income tax is a substitute
for the personal property tax formerly levied on such property.
This substitution feature is further carried out by the property
tax offset described on page 42.
Attention is particularly directed to changes in the income tax
law made at the legislative session of 1913, and discussed on the
pages here indicated r
Profits derived from the sale of real estate or other capital
assets held for more than three years Page 9
Income from rentals and royalties from property without
the state Pages 10 and 11
Depreciation and exhaustion of mines Pages 13, 14, 17
Limitation of interest deductible* by corporations Pages 13 and 14
Tax on bondholders of corporations Page 14
Exemption of banks from operation of Income Tax Law Page 14
Exemption of dividends from banks and trust com-
panies Pages 16 and 19
Tax on bank stock not to be used as an offset to income
tax Pages 16 and 42
Exemption of $200 for actual as contrasted with legal de-
pendents Page 20
Change in rate of taxation applicable to corporations.. Pages 23 to 25
6 The Wisconsin Income Tax Law.
By chapter 554, laws of 1913, subdivisions 1087m — 3 (f) and
1087m — 4 (e) and (f) of the original income tax law, exempting
salaries received by officials of the United States and int-
erest received from United States bonds and other securities
exempt from taxation under the laws of the United States, have
been repealed. In accordance with the apparent legislative in-
tent evidenced by the repeal of these exemptions, such income
will be assessed and taxed unless the courts decide otherwise.
THE WISCONSIN INCOME TAX LAW
With Explanatory Notes
PART I.
This law was originally enacted as Chapter 658, Laws of 1911.
It has been amended by Chapters 27, 443, 487, 554, 615 and 720,
Laws of 1913. The text of the law now reads as follows :
I.
For what period tax levied.
Section 1087m — 1. There shall be assessed, levied, collected
and paid a tax upon incomes received during the year ending
December 31, 1911, and upon incomes received annually there-
after, by such persons and from such sources as hereinafter de-
scribed ; provided, that firms, copartnerships, corporations, joint
stock companies and associations which customarily close their
annual accounts on a date other than December 31, or which
customarily estimate their income or profits on a basis other than
of actual cash receipts and disbursements, may, with the consent
and approval of the tax commission, return for assessment and
taxation the income or profits earned during the business year
for which the accounts of such person are customarily made up.
The first assessment under this law was made in 1912 on the
income received in 1911. The tax was collected by local treas-
urers at the time other taxes were collected — in December, 1912,
and January, 1913.
In general returns should be made for the calendar year.
Where this would cause particular hardship, authority may be
secured from the tax commission to make a return for the busi-
ness year. In its principal results and conclusions, (though not
in form), the return should correspond substantially with the
. ■
8 The Wisconsin Income Tax Law.
report made to the federal government. Lack of correspon-
dence may cause investigation that would otherwise be unneces-
sary.
The federal income tax law of 1913 in paragraph (d) of sub-
section G, provides that
“the proper officers of any state imposing a general income
tax, may, upon the request of the governor thereof, have access
to said (federal corporation income) returns or to an abstract
thereof, showing the name and income of each such corporation,
joint stock company, association or insurance company, at such
times and in such a manner as the Secretary of the Treasury may
prescribe.”
Definition of “person”.
Section 1087m — 2. 1. The term “person,” as used in this
act, shall mean and include any individual, firm, copartnership,
and every corporation, joint stock company or association organ-
ized for profit, and having a capital stock represented by shares,
unless otherwise expressly stated.
For the sake of brevity and convenience it has been thought
best to use the word “individuals” where natural persons are
referred to and the word “corporations” as the equivalent of
“corporation, joint stock company or association organized for
profit.”
What income includes.
Section 1087m — 2. 2. The term “income,” as used in this
act, shall include :
(a) All rent of real estate, including the estimated rental of
residence property occupied by the owner thereof.
(b) All dividends derived from stocks and all interest derived
from money loaned or invested in notes, mortgages, bonds or
other evidence of debt of any kind whatsoever.
(c) All wages, salaries or fees derived from services; pro-
vided, that compensation to public officers for public service
shall not be computed as a part of the taxable income in such
cases where the taxation thereof would be repugnant to the con-
stitution.
(d) All profits derived from the transaction of business or
from the sale of real estate or other capital assets ; provided, that
of the profits derived from the sale of real estate or other capital
assets acquired previous to January 1, 1911, only such propor-
tion shall be taxable as the time between January 1, 1911, and
the date of sale bears to the entire time between the date of
acquisition and the date of sale.
The Wisconsin Income Tax Law. 9
(e) All royalties derived from mines or the possession or use
of franchises or legalized privileges of any kind.
(f) And all other gains, profits or income of any kind derived
from any source whatever except such as hereinafter exempted.
(1913 c. 720).
The income here defined is gross income ; the taxable net in-
come is to be computed by subtracting the deductions and ex-
emptions described on pages 13 to 21.
(a) The deductions for repairs, insurance, depreciation and
taxes “on residence property occupied by the owner thereof”
should not ordinarily exceed 50% of the gross estimated rental
value of such property and in no case more than the entire esti-
mated rental. Greater deductions than the 50% referred to will
be allowed only in exceptional cases. Frequently the most ac-
curate way of estimating the net rental value of such property
is to inquire what rent could be secured from a tenant or lessee
who assumed all expenses except interest on debt. The deduc-
tion for insurance should cover the cost of insurance for one
year.
(b) Dividends and interest are taxed at the residence of the
recipient just as stock and bonds were taxed when subject to the
property tax.
(c) While there are precedents holding salaries of public offi-
cers and especially judicial officers under the civil war income
tax act exempt from taxation on constitutional grounds, the rea-
soning upon which such rulings are based is highly technical
and it is not believed that it applies to the Wisconsin law. It
is not apparent why public officers should not contribute to the
support of government like other citizens so long as they are not
singled out for discrimination. The tax commission has accord-
ingly ruled that salaries of public officers should be returned for
taxation and assessed as income until the courts decide other-
wise.
(d) The “three year rule” previously applicable to profits
derived from the sale of real estate and capital assets has been
repealed and replaced by the prorating process provided in sec-
tion 1087m — 2. 2. (d). Note that this process or rule refers
only to durable properties not customarily held for sale, such as
land and buildings and has no reference to profits derived from
the sale of ordinary stock in trade. Keal estate companies
which treat their holdings as merchants do their stock of goods
10
• The Wisconsin Income Tax Law.
are an exception to the general provisions of this paragraph of
the law.
Under the present law if property were purchased in July
1906 and sold at a profit of $5,000 in January 1914, the amount
taxable would be. determined upon as follows :
July 1906 to January 1911 = 4% years
January 1911 to January 1914 = 3 years
3/7% = 2-5 Two-fifths of $5,000 = $2,000
The profit taxable on such a sale would accordingly be $2,000.
Income of residents and nonresidents.
Section 1087m — 2 3. The tax shall be assessed, levied and
collected upon all income, not hereinafter exempted, received
by every person residing within the state, and by every nonresi-
dent of the state, upon such income as is derived from property
located or business transacted within the state. In determining
taxable income, rentals, royalties, and gains or profit from the
operation of any farm, mine, or quarry shall follow the situs of
the property from which derived, and income from personal ser-
vice and from land contracts, mortgages, stocks, bonds and se-
curities shall follow the residence of the recipient. With re-
spect to other income, persons engaged in business within and
without the state shall be taxed only upon such income as* is
derived from business transacted and property located within
the state, which may be determined by an allocation and sepa-
rate accounting for such income when made in form and man-
ner prescribed by the tax commission, but otherwise shall be de-
termined in the manner specified in subdivision (e) of subsec-
tion 7 of section 1770b of the statutes, as far as applicable.
(1913 c. 720).
The preceding subsection divides" income into three classes :
(a) income which follows the situs of the property, (b) income
which follows the residence of the recipient, (c) apportionable
income, f Thus a resident of Wisconsin is not taxable on rent
received from property in Michigan or profits derived from' the
operation of a mine or farm in Minnesota; whereas a resident
of Illinois is .taxable on rent or profits derived from property in
Wisconsin. ] On the other hand, dividends received from corpo-
rations, profits from copartnerships and interest from land
contracts, mortgages, bonds and securities follow the residence
of the recipient. ^ Interest received by nonresidents from mort-
gages secured by property in Wisconsin is not subject to the
tax. Interest and discounts, however, received by foreign
business concerns incident to their Wisconsin business — e. g.,
The Wisconsin Income Tax Law. 11
from bank deposits, bills and accounts receivable, etc. — do not
necessarily follow the legal domicile of the company, but should
be treated as “apportionable” income, as explained below.
In dealing with income which neither follows the situs of the
property nor the residence of the recipient, two processes are
authorized by law: a separate accounting or an apportionment.
Mercantile concerns and a few other classes with which special
arrangements have been made in the past, will be expected to
make the separate accounting; but other corporations desirous
of making a separate or allocated return for Wisconsin business
only, must apply to the tax commission in advance, stating
clearly the reasons why a separate accounting is preferable.
The apportionment process specified in subdivision (e) of sub-
section (f) of section 1770b of the statutes constitutes the gen-
eral rule. It is as follows:
“In determining the proportion of capital stock employed
in the state, the same shall be computed by taking the gross busi-
ness in dollars of the corporation in the state and add[ing] the
same to the full value in dollars of the property of the corpora-
tion located in the state. The sum so obtained shall be the nu-
merator of a fraction of which the denominator shall consist of
the total gross business in dollars of the corporation, both within
and ^without the state, added to the full value in dollars of the
entire property of the corporation, both within and without the
state. The fraction so obtained shall represent the proportion
of the capital stock represented within the state.”
This rule is to be followed “only as far as applicable.” Con-
sidering that it was originally devised for another purpose and
that important classes of income are not subject to this rule, it
is believed that “property” as used in the apportionment frac-
tion means property from which apportionable income is de-
rived, i. e., the full or book value of property other than or ex-
cluding farms, mines, quarries and property yielding rents and
royalties (the income from which follows the situs of the prop-
erty), and land contracts, mortgages, stocks, bonds and securi-
ties (the income from which follows the residence of the reci-
pient) .
‘ 1 Gross business ’ ’ it will be noted also consists of at least two
elements : the business of production and that of distribution or
sale. The former is measured by costs of production, the latter
by gross sales minus, costs of production. Thus, if an Illinois
corporation manufactures products in Wisconsin costing $600,-
12
The Wisconsin Income Tax Law.
000 and sells these products in Illinois for $1,000,000, the gross
business within Wisconsin is $600,000 and that without the state
is $400,000. The operation of the apportionment process may
be illustrated as follows :
Company A. incorporated in Illinois earns net income of
$90,000, of which $6,000 is derived from a mine in Michigan,
$4,000 from bonds and $80,000 from a manufacturing business
of which the factory is in Wisconsin and the sales department
in Chicago. It is further assumed that the gross sales are
$1,000,000, the manufacturing costs $600,000, the full value of
the mine $50,000, the full value of the bonds $70,000, and the
value of other property $900,000, of which the Wisconsin plant
represents $500,000.
Full value of property
Within the
State.
.. $500,000
Within & Without
the State.
$900,000
Gross business of production . . 600,000
600,000
Gross’ business of distribution
sale
or
0
400,000
Total
. .$1,100,000
$1,900,000
1,100,000
= 57.9%
1,900,000
Total net income
. . $90,000
Nonapportionable income
(in
this case exempt)
10,000
Apportionable income
Per cent to Wisconsin
. . $80,000
57.9
Taxable income
. . $46,320
Tax
2,319.20
The Wisconsin Income Tax Law.
13
II.
DEDUCTIONS ALLOWED CORPORATIONS.
Section 1087m — 3. Every corporation, joint stock company
or association shall be allowed to make from its gross income the
following deductions :
Wages and salaries.
(a) Payments made within the year for wages of employees
and salaries of officers if reasonable in amount, for services act- ■
ually rendered producing such income; provided, there be re-
ported the name, address and amount paid each such employee
or officer residing within this state to whom a compensation of
seven hundred dollars or more shall have been paid during the
assessment year. (1913 c. 720.)
» Under this provision the commission is vested with the right to
disallow a claim for deduction because of salaries paid, if it shall
be determined either that the salaries under consideration were
excessive, or were not paid for services actually rendered in the
production of the income, or that the corporation has failed to
give the name of the persons in Wisconsin actually receiving
compensation of $700 or more for the year.
In accordance with section 1087m — 10 and section 1087m — 28,
every corporation, whether liable to pay an income tax or not,
should furnish a list of its employees and officers* residing in
Wisconsin, together with a statement of the wages* and salaries
paid to them if in excess of $700.
Expenses; Depreciation; Interest.
Section 1087m — 3. (b) Other ordinary and necessary ex-
penses actually paid within the year out of income in the main-
tenance and operation of its business and property, including a
reasonable allowance for depreciation by use, wear and tear of
property from which the income is derived and in the case of
mines and quarries* an allowance for depletion of ores and other
natural deposits on the basis of their actual original cost in cash
or the equivalent of cash ; and including also interest paid on its
bonded or other indebtedness to an amount of such indebted-
ness not exceeding its paid up capital stock outstanding at the
close of the year;, provided, that the amount of such capital
stock shall in no case exceed the clear value of its assets over and
above all indebtedness and liabilities. (1913 c. 720.)
14
The Wisconsin Income Tax Law.
Payments made for additions or improvements are not “ordi-
nary or necessary expenses’ ’ and are not deductible from in-
come. “Repairs” properly defined are deductible, but renew-
als or replacements of entire units of property, suck as ma-
chines, are properly covered by depreciation, past or current, do
not constitute “repairs,” and cannot be deducted from income.
Experience has shown that it is impracticable to allow depre-
ciation in excess of that actually recorded on the books of the
corporation. Unless the depreciation is certain enough to be
officially recognized by the corporation on its books, it cannot be
regarded as reasonable. Confusion and duplicate deduc-
tions almost inevitably occur whenever any other procedure is
followed. Depreciation is limited to deteroriation or exhaus-
tion “by use, wear and tear,” and does not cover fluctuations
in market value. Depreciation of merchants’ stocks cannot be
allowed as such since it is properly cared for in the inventories,
if the goods are still on hand, or if they have been sold, is prop-
erly represented in the decreased receipts from sales. Moreover
the inventories at the beginning and end of the year must be on
the same basis; if at the beginning of the year stock is inven-
toried at cost, it must be so inventoried at the end of the year.
The amount of interest deductible as an item of expense ,is
limited to the amount payable on an indebtedness not in excess
of the paid up capital stock outstanding at the close of the year.
Thus a corporation whose capital stock on December 31, 1913,
was $100,000 could not deduct as interest more than the amount
necessary for the payment of interest on that sum. Assuming
six per cent to be the rate of interest which the particular cor-
poration in question is paying, then not more than $6,000 could
be deducted. On the other hand, if its indebtedness were all
bonded and amounted to $150,000, with interest at four per cent,
then not more than four per cent on the $100,000 paid up capi-
tal stock could be deducted. Furthermore, whenever the clear
value of a corporation’s assets exceeds its liabilities by less than
its* paid up capital stock, then the allowance deduction because
of interest on indebtedness is limited by the difference between
its assets and liabilities.
If assets are less than capital stock the limitation is fixed by
the amount of assets. If paid up capital stock is less than as-
sets the paid up capital stock fixes the limitation.
(The Wisconsin Income Tax Law.
15
Losses.
Section 1087m — 3. (c) Losses actually sustained within the
year and not compensated for by insurance or otherwise.
This provision limits deductions for losses to those which were
sustained during the year covered by the return and cannot be
extended to claims which became worthless prior to that time,
unless they became definite and were satisfied or charged off
during the year. In no event can losses which occurred prior
to the enactment of the income tax law be allowed as deductions.
It is believed that the legislature intended the provisions of the
law relating to assessment of income and deduction of losses to
be correlative and that a loss resulting from a given transaction
should not be allowed as a deduction unless the profit from such
transaction, if one had been realized, could be taxed as income.
This rule prohibits the deduction of losses resulting from busi-
ness transacted without the state the profit from which could
not be taxed if one had been realized. Bad accounts may be de-
ducted as losses if previously reported as income but not other-
wise. The exact amount of the loss and the manner in which
it occurred must be fully set forth in order to secure the deduc-
tion.
Taxes.
Section 1087m — 3. .(d) Sums paid by such person within the
year for taxes imposed by any state of this union or subdivision
thereof, or any territory or possession of. the United States, upon
the source from which the income taxed by this act is derived.
This section refers to general taxes paid upon property from
which the income is derived. Taxes paid upon unimproved real
estate and upon idle property held for investment or speculation
cannot be deducted. Income taxes paid in cash may be de-
ducted as “necessary expenses.” Taxes paid by corporations
cannot be allowed as deductions from the income of the stock-
holder. Special assessments are not to be considered as taxes
because they are based on the theory that the property is bene-
fited to the amount of the special assessment imposed.
Dividends.
Section 1087m — 3. (e) Dividends or income received with-
in the year from stocks or interest in any copartnership, corpo-
ration, joint stock company or association, the income of which
shall have been assessed under the provisions of this act ; pro-
16
The Wisconsin Income Tax Law.
vided that when only part of the income of the copartnership,
corporation, joint stock company or association from which such
dividend or income was received shall have been assessed under
this act only a corresponding part of such dividend or income
shall be deducted; provided, further, that such copartnership,
corporation, joint stock company or association report the name
and address of each person owning stocks or having such inter-
est and the amount of dividends or income paid such person dur-
ing the assessment year. (1913 c. 720.)
The object of this paragraph is to prevent double, taxation.
It means simply that any corporation owning stock or interest in
any copartnership, corporation, joint stock company or associ-
ation may deduct from its return of income that proportion of
the dividends or income upon which income taxes have already
been paid. If the copartnership or corporation does not report
the name and address of the persons owning stocks or interest
and the amount of dividends or income paid, the deductions
cannot be allowed. The reports of copartnerships will be made
to the income tax assessors. Corporations will report to the tax
commission.
Bank Dividends.
Section 1087m — 3. (g) Dividends received from state banks,
national banks, mutual savings banks and trust companies sub-
ject to taxation by this state. (1913 c. 615.)
Under this provision bank dividends may be deducted, al-
though banks paying such dividends are not assessed under this
act. (See 1087m — 5, sub. 2.) The personalty tax on bank stock
cannot be used to offset the income tax. (See section 1087m—
26.) Bank stock is assessable as heretofore under the property
tax law and has been entirely separated from any connection with
the income tax. Logically the personal property tax paid upon
such stock, whether paid by the bank or the individual stock-
holder, is the tax of the corporation and cannot be used as an
offset against the income tax of the stockholder.
Ti-ie Wisconsin Income Tax Law.
17
III.
DEDUCTIONS ALLOWED TO INDIVIDUALS.
Section 1087m — 4. Persons other than corporations, joint
stock companies or associations, in reporting incomes for purposes
of taxation shall be allowed the following deductions:
Wages and salaries.
(a) Payments made within the year for wages of employees and
a reasonable allowance for services of copartners or members of a
firm actually rendered in producing such income. But no deduc-
tions shall be made for any amount paid for personal services un-
less there be reported the name and address and amount paid each
such employee or copartner to whom a sum of seven hundred dol-
lars or more shall have been paid during the assessment year.
Deductions of reasonable salaries by copartners is now ex-
plicitly authorized.
Ordinary and necessary expenses.
(aa) The ordinary and necessary expenses actually paid within
the year in carrying on the profession, occupation or business
from which the income is derived, including a reasonable allow-
ance for depreciation by use, wear and tear of the property from
which the income is derived, and in the case of mines and quar-
ries an allowance for depletion of ores and other natural deposits
on the basis of their actual original cost in cash or the equivalent
of cash. (1913 c. 7 20)
' •l«‘' \ /
Losses.
Section 1087m — 4. (b) Losses during the year and not com-
pensated for by insurance or otherwise.
See note to section 1087m — 3 (c).
Dividends.
Section 1087m — 4. (c) Dividends or incomes received by
any person from stocks or interest in any copartnership, corpora-
tion, joint stock company or association, the income of which shall
have been assessed under the provisions of this act; provided
that when only part of the income of any copartnership, corpo-
ration, joint stock company or association shall have been as-
sessed under this act only a corresponding part of the dividends
or income received therefrom shall be deducted, and provided,
18
The Wisconsin Income Tax Law.
further, that said copartnership, corporation, joint stock com-
pany or association report the name and address of each person
owning stock or having such interest and the amount of divi-
dends or income paid such person during the assessment year.
(1913 c. 720.)
See note to section 1087m — 3(e). The amendment of 1913
above given limits the deduction permitted the individual to the
same ratio that applies to the corporation, etc., where, for in-
stance, the corporation is transacting business within and with-
out the state.
Interest on indebtedness.
Section 1087m — 4. (d) .Interest paid within the year on ex-
isting indebtedness ; provided, the debtor reports the amount so
paid, the form of the indebtedness, together with the name and
address of the creditor.
Pensions.
Section 1087m- — 4. (g) Pensions received from the United
States.
Taxes.
Section 1087m — 4. (h) Taxes paid by such persons during
the year other than inheritance taxes upon the property or busi-
ness from which the income hereby taxed is derived.
This does not mean that all taxes can be deducted, but only
those paid upon the property which produced the income.
Income taxes, however, paid in cash may be deducted as neces-
sary expenses of the year in which they are actually paid, if
separately reported at the place provided therefor on the blank
form. Special assessments are not deductible. See note to sec-
tion 1087m — 3 (d).
Inheritances.
Section 1087m — 4. (i). All inheritances, devises and bequests
received during the year which are subject to and have complied
with the inheritance tax laws of this state. ( 1913 c. 720.)
Inheritances, etc., received by resident beneficiaries from
estates probated without the state are taxable, but inheritances,
etc., which are subject to and have complied with the inherit-
ance tax law of Wisconsin, are not taxable whether they have
been actually taxed or not.
The Wisconsin Income Tax Law. 19
To illustrate : Under the inheritance tax law the widow has
an exemption of $10,000. This amount of $10,000 having com-
plied with the inheritance tax law of this state, ” is not subject
to the income tax although it has paid no inheritance tax. It is
compliance with the law that governs, whether any tax be paid
or not. ,
Life insurance.
Section 1087m — 4. (j) Insurance to the total amount of ten
thousand dollars received by any person or persons legally de-
pendent upon the decedent, in payment of a death claim by any
insurance company, fraternal benefit society or other insurer.
It is only the life insurance in excess of $10,000 which is sub-
ject to an income tax.
The expression ‘ 'legally dependent upon the decedent’ ’ is
more restricted in its application than is perhaps generally sup-
posed. Children are legally dependent upon their parents until
they become of age and wives are legally dependent upon their
husbands. But parents are not legally dependent upon their
children nor husbands upon their wives except in cases where
such person is “a poor person who is blind, old, lame , impotent
or decrepit so as to be unable to maintain himself.” (See sec-
tion 1502, revised statutes, as amended by chapter 207, laws of
1909). Brothers and sisters, uncles and aunts and nephews and
nieces, grandparents and grandchildren are not “legally de-
pendent” upon each other except in certain special circum-
stances resulting from court proceedings.
Upon the marriage of a daughter the obligation of the par-
ent to support her ceases as the husband then becomes liable.
A husband is under no legal obligation to support his wife’s*
parents. A stepfather is not necessarily bound to support a
stepchild ; but if he receives the child into his family and treats
it as a member thereof, he stands in the place of the natural
parent and the reciprocal rights, duties and obligations of par-
ent and child continue as long as such relation continues. With
the exception just noted a stepchild is not bound to support its
step-parent.
Bank dividends.
Section 1087m — 4. (k) Dividends received from state banks,
national banks, mutual savings banks and trust companies sub-
ject to taxation by this state.' (1913 c. 615.)
See note to section 1087 — 3 (g).
20
The Wisconsin Income Tax Law.
IV.
EXEMPTIONS.
Exemptions to individuals.
Section 1087m — 5. 1. There shall be exempt from taxation
under this act income as follows, to wit :
(a) To an individual income up to and including eight hun-
dred dollars;
(b) To husband and wife, twelve hundred dollars;
(c) For each child under the age of eighteen years, two hun-
dred dollars;
(d) For each additional person, who is actually supported by
and entirely dependent upon the taxpayer for his support, two
hundred dollars. (1913 c. 720.)
The burden of proof rests on the person claiming exemption
under (d) above to show that the person on account of whom he
is claiming $200 additional exemption is not only 1 1 actually sup-
ported by” him but is also “entirely dependent upon” him.
Nonresidents, firms, corporations, etc. Income of wife and
children.
Section 1087m — ‘5. 1. (e) The af presaid exemption shall not
apply to incomes derived from sources within the state by non-
residents thereof, nor to copartnerships, corporations, joint
stock companies nor associations. In computing said exemp-
tions and the amounts of taxes payable by persons residing to-
gether as members of a family, the income of the wife and the in-
come of each child under eighteen years of age shall be added
to that of the husband or father, or if he be not living, to that of
the head of the family and assessed to him. The taxes levied
thereon shall be payable by such husband or head of the family,
but if not paid by him may be enforced against any person whose
income is included in the assessment. (1913 c. 720.)
Banking, religious, educational, scientific, and benevolent as
sociations.
Section 1087m— 5. 2. Income of state banks, national
banks, mutual savings banks, trust companies and building and
loan associations and of all religious, scientific, educational, be-
nevolent or other corporations or associations of individuals not
organized or conducted for pecuniary profit. (1913 c. 615.)
This exemption benefits only associations and not individuals
such as clergymen, charity workers, and the like. The words
The Wisconsin Income Tax Law. 21
“pecuniary profit” are evidently taken from subdivision 3 of
section 1038 of the statutes, and so far as possible should receive
the same construction in connection with income taxation as
with property taxation. Speaking generally, this section must
be strictly interpreted and alf doubts resolved in favor of taxa-
tion and against exemption. For example, cooperative associa-
tions, other than mutual savings or loan and building associa-
tions would appear to be plainly subject to taxation when they
make and declare dividends or in any way are conducted for
the pecuniary profit of the group of associates.
Incomes from public service corporations.
Section 1087m — 5. 3. Incomes derived from property and
privileges by persons now required by law to pay taxes or license
fees directly into the treasury of the state in lieu of taxes, and
such persons shall continue to pay taxes and license fees as here-
tofore.
This section would seem to exempt from the payment of in-
come tax:
a. Railroad companies
b. Palace and sleeping car companies
c. Freight line and equipment companies «
d. Express companies’
e. Street railway companies including connected electric
light, heat and power companies
f. Telegraph companies
g. Fire insurance companies
h. Life insurance companies
i. Accident, surety, etc. companies
j. Telephone companies
k. Title guaranty companies.
This section does not exempt water, light, heat, power and
other public utilities taxed locally, nor does it exempt from the
income tax income from outside investments in property, such
as lands, securities, etc., not used in the operation of the corpo-
ration as a public utility.
Public funds.
Section 1087m — 5. 4. Income received by the United States,
the state and all counties, cities, villages, school districts or other
political units of this state.
22
The Wisconsin Income Tax Law.
V.
RATES.
Rates for individuals.
Section 1087m — 6. 1. -The tax to be assessed, levied and col-
lected upon the incomes of all persons, except as otherwise pro-
vided by law, after making such deductions and exemptions as
are hereinbefore allowed, shall be computed at the following
rates, to wit :
(a) On the first one thousand dollars of taxable income or any
part thereof, at the rate of one per cent ;
(b) On the second one thousand dollars or any part thereof,
one and one-fourth per cent;
(c) On the third one thousand dollars or any part thereof,
one and one-half per cent ;
(d) On the fourth one thousand dollars or any part thereof,
one and three;fourths per cent ;
(e) On the fifth one thousand dollars or any part thereof, two
per cent;
(f) On the sixth one thousand dollars or any part thereof,
two and one-half per cent ;
(g) On the seventh one thousand dollars or any part thereof,
three per cent ;
(h) On the eighth one thousand dollars or any part thereof,
three and one-half per cent;
(i) On the ninth one thousand dollars or any part thereof, four
per cent;
(j) On the tenth one thousand dollars or any part thereof,
four and one-half per cent;
(k) On the eleventh one thousand dollars or any part thereof,
five per cent;
(l) On the twelfth one thousand dollars or any part thereof,
five and one-half per cent ;
(m) On any sum of taxable income in excess’ of twelve thou-
sand dollars, six per cent.
<- In the case of individuals, the rate for each thousand dollars
up to $12,000 is distinct and separate. The tax upon $5,000
would consist of
1% upon the IsL $1,000 $10.00
1V4% upon the 2nd $1,000 12.50
1%% upon the 3rd $1,000 15.00
1%% upon the 4th $1,000 17.50
2% upon the 5th $1,000 20.00
Total tax $75.00
The Wisconsin Income Tax Law. 23
$75.00 would be 1%% of $5,000. In like manner the rate for
the twelfth thousand is 5%% ; but the amount of tax payable
upon $12,000 would be only $355, or 2.95%. The rate on that
portion of incomes which exceeds $12,000 is 6% but the tax
never quite equals that percentage.
The following table applying to even thousands may be of as-
sistance in computing rates :
±.
Taxable
income.
Hate
per
cent.
Tax.
Total
income
taxed.
Total
tax.
True rate
on whole
amount.
1st
$1,000
$10 00
$1,000
$10 00
%
1.
2nd
1,000
11
12 50
2,000
22 50
1.125
3rd
1,000
14
15 00
3,000
37 50
1.25
4th
1,000
U
17 50
4,000
55 00
1.373
5th
6 th.'
1,000
2
20 00
5,000
75 00
1.5
1,000
24
25 00
6.000
100 00
1.6667
7th
1,000
3
30 00
7,000
130 00
1.8571
8th
1,000
34
35 00
8,000
165 00
2.0625
9th
1,000
4
40 00
9,000
205 00
2.2778
10th
1,000
44
45 00
10,000
250 00
2.5
11th
1,000
5
50 00
11,000
300 00.
2.7273
12th
1,000
54
55 00
12,000
355 00
2.9582
13th
1,000
6
60 00
13,000
415 00
3.1923
15th
1,000
6
60 00
15,000
535 00
3.5667
20th
1,000
6
60 00
20,000
835 00
4.175
m
To compute the amount of tax on a taxable income which ex-
ceeds $12,000, add 6% of the excess over $12,000 to $355.
Rates for corporations.
Section 1087m — 6. 2. The taxes to be assessed, levied and
collected upon the incomes of corporations, joint stock com-
panies or associations, after making such deductions and exemp-
tions as hereinbefore allowed, shall be computed at the follow-
ing rates, to wit :
On the first $1,000 of taxable income or any part thereof. . . .2%
On the second $1,000 of taxable income or any part thereof. .2y2
On the third $1,000 of taxable income or any part thereof. . .3
On the fourth $1,000 of taxable income or any part thereof. .Sy2
On the fifth $1,000 of taxable income or any part thereof. . . .4
On the sixth $1,000 of taxable income or any part thereof. . .5
On the seventh $1,000 of taxable income or any part thereof 6
On all taxable income in excess of $7,000 6
(1913 c. 720.)
The first step toward computing the income tax is to ascertain
the amount of taxable income. By taxable income is meant the
24
The Wisconsin Income Tax Law.
gross income for the year less the deductions and exemptions.
This can perhaps best be illustrated by a concrete, example as
follows :
Gross Income:
Operation of business (total cash and credit sales) $118,257.60
Interest on mortgages 615.38
Dividends on stocks 1,000.00
Interest on bonds 750.00
Collection of claims heretofore charged off as loss 300.00
Sale of capital assets purchased January 1906 for $5,000
sold January 1913 for 6,820
Profit $1,820
( January 1906 to January 1911 = 5 years)
( ) 2/7 assignable
(January 1911 to January 1913 = 2 years) to 1913 or 520.00
Total income $121,442.98
Inventory January 1, 1914 41,008.31
$162,451.29
Inventory January 1, 1913 39,530.04
Total income and inventories $122,921.25
Gross Deductions:
Goods and materials purchased during 1913 $98,528.71
Wages and salaries 8,320.00
Repairs 736.07
Rent 1,200.00
Depreciation actually written off on books-of company 800.00
Losses of the year not compensated for by insurance or
otherwise .. 225.79
Taxes paid on property used in production of company’s
income 971.25
Dividends received from corporations assessed for state in-
come tax 800.00
Interest paid on indebtedness 913.44
Federal excise tax paid during 1913 28.78
Other necessary expenses (properly enumerated in detail in
space provided therefor) 1,607.21
Total deductions $114,131.25
Total taxable income 8,790.00
The tax on the above assessment would be
for the first $6,000 $200.00
for the remaining $2,790 at 6% 167.40
Total tax $367.40
The foregoing example is presented as a simple illustration of
the most important features of an income account such as the
commission requires to be filled in by all corporations licensed
to transact business within this state.
The rate upon corporation income is different for each $1,000
up to $7,000. For example, the rate on the fifth thousand dol-
The Wisconsin Income Tax Law.
25
lars is four per cent but this does not apply to the constituent
parts below $5,000. The tax upon $5,000 would consist of :
2% upon the 1st $1,000 $20.00
2 1/2% upon the 2nd $1,000 25.00
3% upon, the 3rd $1,000 30.00
3i/2% upon the 4th $1,000 35.00
4% upon the 5th $1,000 40.00
Total tax $150.00
$150 is 3% of $5,000.
The following table, which applies only to even thousands, may
be helpful in computing rates :
Taxable income.
Rate per
cent.
Tax.
J Tot al
income
taxed.
Total tax.
True rate on
whole
amount in
even
thousands.
1st $1,000
' 2 1
$20 00
$1,000
$20 00
2%
2nd $1,000
2i
25 00
2,000
45 00
2.25
3rd $1,000
3
30 00
3,000
75 00
2.5
4th $1,000
3i
35 00
4,000
110 00
2.75
5th $1,000
4
40 00
5,000
150 00
3.
6th $1,000
5
50 00
6,000
200 00
3.3333
7th $1,000
6
60 00
7.000
260 00
3.7143
8 h- $1,000
6
60 00
8,000
320 00
4.
9th $1,000
6
60 00
9,000
380 00
4 2292
10th $1,000
6
60 00
10,000
440 00
4.4"
15th $1,000
6
60 00
15,000
740 00
4.9333
20th $1,000
6
60 00
20,000
1
1,040 00
5.2
26
The Wisconsin Income Tax Law.
PART II.
ADMINISTRATION.
Division of state into assessment districts.
Section 1087m — 8. 1. The state shall be divided into assess-
ment districts by the state tax commission, but in no instance
shall a county be divided.
In accordance with this authority the tax commission has
made the following division of the state into forty-one districts :
No. of
district
1. Kenosha
2. Racine
3. Walworth
4. Rock
5. Green, Lafayette
6. Grant, Iowa
7. Dane
8. Jefferson
9. Waukesha
10. Milwaukee
11. Ozaukee, Washington
12. Dodge
13. Columbia
14. Sauk
15. Crawford, Richland
16. La Crosse
17. Adams, Juneau
18. Green Lake, Marquette,
Waushara
19. Winnebago
20. Fond du Lac
No. of ; I
district
21. Sheboygan
22. Calumet, Manitowoc
23. Door, Kewaunee
24. Brown, Oconto
25. Outagamie, Waupaca
26. Portage, Wood
27. Clark, Jackson
28. Buffalo, Pepin, Trempealeau
29. Pierce, St. Croix
30. Chippewa, Barron
31. Marathon
32. Shawano, Langlade
33. Florence, Forest, Marinette
34. Oneida, Vilas, Lincoln
35. Price, Taylor
36. Rusk, Sawyer
37. Burnett, Polk
38. Douglas, Washburn
39. Ashland, Bayfield, Iron
40. Dunn, Eau Claire
41. Monroe, Vernon
The Wisconsin Income Tax Law. 27
Assessors of income ; how appointed.
Section 1087m — 8. 2. Not less than thirty days prior to the
first of March, 1912, there shall he selected and appointed by the
state tax commission an assessor of incomes for £ach assessment
district in the state, who shall hold office for a term of three
years unless sooner removed as hereinafter provided. Such as-
sessor shall be a citizen and an elector of this state, but need not
be a resident of the district in which he is appointed to serve;
provided, however, that so far as practicable, preference shall be
given in making such appointments to residents of the districts. ^
Assessors of incomes; how transferred or removed.
Section 1087m — 8. 3. The tax commission may in its dis-
cretion transfer any assessor of incomes from one district to
another and may remove any assessor of incomes or his deputy
from office.
Oath to be taken and filed.
Section 1087m— 8. 4. Before entering upon his duties such
assessor of incomes shall subscribe to the constitutional oath and
file the same in the office of the secretary of state. He shall be
under the direction and control of the state tax commission, and
shall make such reports to the commission, to the county board
of review and the county board of supervisors, and perform such
other duties as the commission shall direct. (1913 c. 443.)
Deputies and assistants.
Section 1087m — 8. 5. The state tax commission may authorize
any assessor of incomes to appoint such deputies and other as-
sistants as may be required for the proper performance of his
duties. Such deputies shall qualify in like manner and possess
the same powers as the assessor.
Salaries and expenses.
Section 1087m — 9. 1. The salaries of the assessors of in-
comes and their deputies and assistants shall be fixed by the state
tax commission, but such salaries, together with the expenses of
such assessors and their deputies and assistants, shall not in any
year exceed in amount five cents for every thousand dollars of
the valuation of all property as fixed by the tax commission in
the state assessment of the preceding year. The assessor shall be
furnished all necessary printing, stationery, postage and office
equipment, and* he and his deputies shall be entitled to receive
their actual necessary expenses incurred in the performance of
their duties. The salaries of the assessor and his assistants, and
all such expenditures shall be audited and paid out of the state
treasury in the same manner as other similar salaries and state
expenses are audited and paid.
28 The Wisconsin Income Tax Law.
2. The county board of each county in which the assessor of
incomes has an office shall provide at the expense of the county
a suitable room or rooms in the courthouse or other convenient
building at the county seat for the use of such assessor. If any
county shall fail or refuse to furnish suitable quarters for the
use of the assessor of incomes as herein provided the tax com-
mission may procure such quarters at the expense of the county
primarily responsible therefor. ( 1913 c. 487.)
"When and by whom assessments made.
Section 1087m — 10. 1. The state tax commission and the
assessors of incomes shall annually on the first day . of January,
or as soon thereafter as practicable, proceed to assess as herein-
after provided every income received during the preceding cal-
endar year liable to taxation under the provisions of this act.
Liability to taxation for income which follows the residence of
vthe recipient in the case of persons moving into or out of the state
shall be determined by the residence of such person on the
thirty-first day of December of the income year, and liability to
taxation on like income in the case of corporations which have
been created or dissolved before assessment shall be determined
by the status of such corporation on the same date. The assess-
ment of corporations, joint stock companies and associations
shall be made by the state tax commission, and the assessment of
persons other than corporations, joint stock companies and asso-
ciations shall be by the county assessor of incomes. (1913 c.
720.)
Powers of tax commission and assessors of incomes.
Section 1087m — 10. 2. In the performance of such duty the
state tax commission and the county assessors of incomes shall
respectively possess all powers now or hereafter granted by law
to the state tax commission or assessors in the assessment of per-
sonal property and also the power to estimate incomes.
Among the powers conferred by this section are those set forth
in section 1056 of the Revised Statutes authorizing the assessor
to examine persons under oath and to require them to make
sworn statements. The “ power to estimate incomes’’ is the so-
called “ doomage power.”
*
Returns by corporations.
Section 1087m — 10. 3. Every corporation, joint stock com-
pany or association, whether taxable under this act or not, shall
furnish to the tax 'commission a true and accurate statement at
such time, in such manner and form and setting forth such facts
as’ said commission shall deem necessary to enforce the provisions
of this act. Such statement shall be made upon the oath or af-
The Wisconsin Income Tax Law.
20
firmation of the president, vice president or other principal officer
and the treasurer of said corporation, joint stock company or as-
sociation.
Every corporation must make a verified return, whether it
has any income or not. The fact that it has no income is to be
determined by the commission, not by the corporation.
Public service corporations and banking, trust, benevolent,
scientific, educational or religious associations are required to
make a statement of the names and addresses of persons in their
employ, residing in Wisconsin, who receive salaries of more than
$700 and the amount paid to each. Blanks for that purpose
will be forwarded to all corporations of which the commission
has knowledge.
Failure to receive blanks, however, will not relieve them from
the duty of making returns.
Returns by individuals.
Section 1087m — 10. 4. Whenever in the judgment of the
assessor of incomes any person in his district other than a corpo-
ration, joint stock company or association shall be subject to an
income tax under the provisions of this act, he shall require such
person to make report at such time and in such manner and form
as the tax commission may prescribe, specifying particularly
among other items the amount of income received from services,
unsecured notes, mortgages, bonds, stocks and real estate, the
amount of income received by his wife and each child under
eighteen years of age residing together with him as members of
the family and such other information as the commission shall
deem necessary to enforce the provisions of this act. (1913 c.
720.)
The fact that the individual is not subject to an income tax
does not relieve him from the necessity of making a return at
the time prescribed by the tax commission.' The penalties for
failing or refusing to make a return will be found in section
1987m — 12, sub. 3, and consist of a fine not to exceed $500, or im-
prisonment, or both, together with the costs of prosecution. A
person who is subject to the income tax is not relieved from the
obligation to make return by the fact that he has not been for-
mally required to do so by the assessor.
Returns by guardians, trustees, etc.
Section 1087m — 10. 5. Every guardian, trustee, executor,
administrator, agent or receiver, and every other person or cor-
poration acting in a fiduciary capacity shall make and render
30
The Wisconsin Income Tax Law.
to the assessor of incomes' of the district in which such represen-
tative resides, a verified list or return of the amount of income
received by him for such person, ward or beneficiary together
with all income received by the ward, beneficiary, deceased or
incompetent person whom he represents or succeeds during the
year covered by the return and shall be liable to assessment and
taxation therefor, subject to the deductions and exemptions pro-
vided in this chapter ; provided, that such deductions or exemp-
tions have not been claimed by or for such person, ward or bene-
ficiary in another capacity. The return so made shall be signed
by the person rendering it, and by the president or secretary
thereof, if a corporation. Every person subject to an income
tax in his representative capacity under this subdivision shall
have all of the remedies and rights of reimbursement for any
tax assessed against or paid by him in such capacity prescribed
by section 1044a of the statutes. (1913 c. 720.)
This section differs materially from the wording of the orig-
inal section in the original law. It makes clear the duty of the
persons acting in the representative capacities named, not only
as to making the return but also as to their responsibility for pay-
ment of the tax, at the same time securing them against per-
sonal loss by giving them a lien upon the property in their pos-
session until reimbursed. Nonresident beneficiaries are not en-
titled to the personal exemptions. If the trust is likely to ter-
minate after making the return and before the tax is payable,
the representative should retain sufficient funds to pay the tax.
Penalty on assessor for questions unanswered.
Section 1087m — 10. 6. For each question unanswered the
assessor or deputy assessor, failing to present satisfactory cause
for such omission to the state tax commission, shall be subject to
a penalty of five dollars, and said penalty shall be deducted
from the compensation of said assessor or deputy assessor at the
time such compensation is paid.
Additions and corrections to returns.
Section 1087m — 11. 1. Whenever evidence shall be produced
before the state tax commission, which in the opinion of the com-
mission, justifies the belief that in any one or more of the three
next previous years the returns made by any corporation, joint
stock company or association are incorrect, or are made with false
or fraudulent intent, or when any corporation, joint stock com-
pany or association has failed or refused to make a return as re-
quired by law the state tax commission may require from every
such corporation, joint stock company or association such fur-
ther information with reference to its capital, income, losses,
The Wisconsin Income Tax Law. 31
expenditures and business transactions as is deemed expedient.
Upon the information so required the state tax commission may
make such additions or corrections to the assessment as is deemed
true and just, such correction to be made in the next tax levy.
Whenever the state tax commission shall so increase or make sub-
ject to tax any income, it shall give notice in writing to the person
liable for the payment of the tax on said income of the amount
of the assessment. Such notice may be served by registered
mail.
This section gives the tax commission power to correct errors
and to reassess incomes of corporations which have failed to pay
the taxes due because of false or erroneous returns at any time
within three years.
Penalty on corporation for false or fraudulent return or fail-
ure to make return.
Section 1087m — 11. 2. In case any return made by any cor-
poration, joint stock company or association is made with false
or fraudulent intent or in case of a refusal or neglect to make a
return as required by law, and an additional amount is discov-
ered, the amount so discovered shall be subject to twice the orig-
inal rate. The amount so added to the tax shall be collected at
such time and in such manner as may be designated by the state
tax commission.
In addition to the power to reassess corporations for taxes
omitted in any of the three previous years, the tax commission is
authorized, if not required, to tax the income at double the orig-
inal rate. In the case of failure to make a return the tax com-
mission may “ estimate ” the income and impose the double tax
rate upon the income thus fixed.
When time for making returns may be extended.
Section 1087m — 11. 3. In case of neglect occasioned by the
sickness or absence of an officer of any corporation, joint stock
company or association required to make said return, or for
other sufficient reason, the state tax commission may allow such
further time for making and delivering such return as it may
deem necessary, not to exceed thirty days.
Penalty on corporation for making false return, etc.
Section 1087m — 11. 4. If any of the corporations, joint
stock companies or associations aforesaid shall fail or refuse to
make, a return at the time or times hereinbefore specified in each
year, or shall render a false or fraudulent return, such corpora-
tion, joint stock company or association shall be liable to a pen-
32
The Wisconsin Income Tax Law.
alty of not less than one hundred dollars and not to exceed five
thousand dollars at the discretion of the court.
Penalties on officers of corporations.
Section 1087m — 11. 5. Any officer of a corporation, joint
stock company or association required by law to make, render,
sign or verify any return who makes any false or fraudulent re-
turn or statement, with intent to defeat or evade the assessment
required by this act to be made, shall upon conviction be fined
not to exceed five hundred dollars or be imprisoned not to exceed
one year, or both, at the discretion of the court, with the cost of
prosecution.
Additions, corrections and reassessments of incomes of in-
dividuals. i h (
Section 1087m — 12. 1. Whenever the assessor of incomes or
the county board of review herein provided for shall have rea-
son to believe that in any one or more of the three next previous
years the returns made by any person other than a corporation,
joint stock company, or association are incorrect or are made
with false or fraudulent intent, or when any such person has
failed or refused to make a return as required by law, the asses-
sor or county board of review shall make such additions or cor-
rections to the next assessment as he or they shall deem true and
just. Whenever the assessor or the county board of review shall
so increase or make subject to tax any income he or they shall
give notice in writing to the person liable for the payment of the
tax on said income of the amount of the assessment. Such no-
tice may be served by registered mail.
This section provides the same method for reassessing income
taxes which have been omitted within three years by individuals
as is set forth in the case of corporations in section 1087m — 11,
sub. 1, except that in the former case the reassessment is made by
the tax commission while for individuals it is made by the asses-
sor of incomes or the board of review.
Penalty for false return by individual.
Section 1087m— 12. 2. In case any return made by any per-
son other than a corporation, joint stock company or association
is made with false or fraudulent intent, or in case of a refusal
or neglect to make a return as required by law, and an addi-
tional amount is discovered, the amount so discovered shall be
subject to twice the original rate.
Every individual who is subject to an income tax should un-
derstand that in case of his refusal or neglect to make a return
he may be required to pay the tax at double the original rates.
The "Wisconsin Income Tax Law.
33
If necessary the income will be “estimated” and the tax com-
puted at twice the regular rate.
Penalty on individual for making false return, etc.
Section 1087m — 12. 3. Any person, other than a corpora-
tion, joint stock company or association who fails or refuses to
make a return at the time hereinbefore specified in each year or
shall render a false or fraudulent return shall upon conviction
be fined not to exceed five hundred dollars, or be imprisoned not
to exceed one year, or both, at the discretion of the court, to-
gether with the cost of prosecution.
)
34
The Wisconsin Income Tax Law.
VIII
APPEAL AND REVIEW.
Appeal by corporation.
Section 1087m — 13. Any corporation, joint stock company
or association subject to assessment by the state tax commission,
feeling aggrieved by the decision of said commission regarding
the assessment of its income, shall be granted the same rights of
hearing and appeal as are now granted corporations assessed by
said commission.
The “ hearing and appeal” referred to in this section is in the
nature of a review or rehearing before the tax commission as to
the amount of income on which the corporation should be taxed.
The section does not refer to proceedings in court nor does it
authorize an action against the state to recover taxes unlawfully
levied, as in the case of steam railroads. Relief from the levy or
collection of an unlawful income tax must be sought under sub-
division 4 of section 1087m — 22 and sections 1164 and 1210g of
the statutes. See Montreal Mining Co. vs. State, 144 N. W. 195.
Board of review— appointment and compensation.
Section 1087m — 14. The state tax commission shall appoint
three resident taxpayers' of each county to serve as a county
board of review, and shall fix their compensation, which shall
not be more than ten dollars per day, and shall be audited and
paid in the same manner as the salary of assessors under this
act is paid.
Duties of county clerk as clerk of board of review.
Section 10$7m — 15. The county clerk shall be clerk of such
board, and shall keep an accurate record of all proceedings
thereof, including a correct record of all changes in the assess-
ment rolls made by the board. The county clerk shall take full
minutes of all evidence given before the board ; provided, how-
ever, that the board, with the approval of the assessor of in-
comes, may in cases where they deem it advisable, employ a
stenographic reporter to take such evidence in shorthand, and
extend the same in typewritten form. The county clerk shall
preserve in his office a record of all such proceedings, minutes
and evidence taken, and all documentary evidence offered. The
stenographer shall be paid by the state, but the board may, in its
discretion, charge the expenses to the complaining party or par-
ties appearing before the board.
Tub Wisconsin Income Tax Law. 35
Board of Review shall meet last Monday of July.
Section 1087m — 16. 1. The county board of review of each
county, constituting, an assessment district, shall meet annually
on the last Monday of July at ten o’clock a. in. at the court house
in said county to hear complaints and to review the assessments
of income made by the assessor. A majority shall constitute a
quorum.
Date of meeting in districts comprising more than one
county.
2. In assessment districts composed of more than one county
the board of review of the county designated by the assessor of
incomes shall meet as provided above and the board of review
of each remaining county of the district shall meet as soon there-
after as is possible for the assessor of incomes to be present.
The date of such meeting shall be fixed by the assessor of in-
comes.
Notice of meeting to be published.
3. Notice of the annual meeting of each county board of re-
view shall be published in a newspaper of the county at least one
week previous to such meeting.
Adjournments."
4. The board may adjourn from day to day, and from time
to time, until its business is completed, but no adjournment
other than from day to day shall be had except upon written
request and for satisfactory cause shown.
Attendance of witnesses and production of books and
papers.
5. Attendance of witnesses and the production of books and
papers before said board may be compelled by subpoena, issued
by the clerk thereof, a justice of the peace or a court commis-
sioner.
Duties of board of review.
Section 1087m — 17. 1. The board shall hear and examine,
and permit the assessor to examine, any aggrieved or other per-
son upon oath who shall appear before it in relation to any as-
sessment or omission of income, and may increase or lessen the
amount of any income assessed, if satisfied from the evidence
submitted and the statements of the assessor, that such change
should be made.
The board of review is particularly charged with the duty of
examining and deciding upon the facts of disputed cases. With
respect to the law it is desirable that such boards should follow
36 The Wisconsin Income Tax Law.
closely the ruling of the courts and the tax commission in order
that there may be uniformity of treatment throughout the
state.
Board must give notice of changes in assessment.
2. The board shall not increase any assessments, nor assess
any income not on the roll without notice in writing to the per-
son liable for payment of the tax thereon, or his agent, if either
be resident of the county, of such intention in time to appear
and be heard before the board in relation thereto.
Objections to assessment must be made before board of
review.
Section 1087m — 18. No person subject to assessment by the
county assessor shall be allowed in any action or proceeding to
question any assessment of income, unless objections thereto
shall first have been presented to the county board of review in
good faith and full disclosure made under oath of any and all
income of such party liable to assessment.
Appeal may be taken to state tax commission.
Section 1087m — 19. 1. Any person dissatisfied with any de-
termination of the county board of review may appeal within
twenty days to the state tax commission, to whom a copy of the
record of the board shall be certified, together with all evidence
or a copy thereof, relating to such assessment.
Tax commission may review assessments on appeal.
2. The tax commission shall review such assessments from the
record thus submitted and shall make necessary corrections and
certify its conclusion to the county clerk, who shall duly notify
the person liable for the tax and enter upon the assessment roll
any change made by the commission.
The Wisconsin Income Tax Law.
37
IX
APPORTIONMENT AND COLLECTION.
Tax commission to compute and certify tax on corpora-
tions.
Section 1087m — 20. 1. The state tax commission shall com-
plete the assessment of income for each corporation, joint stock
company, and association on or before the fifteenth day of Octo-
ber in each year and compute the tax thereon, and shall there-
upon forthwith certify to each county clerk a statement of the
assessment of each corporation, joint stock company and asso-
ciation in his county and the amount of tax levied against each.
Tax commission to make report.
2. The state tax commission shall submit in their biennial re-
port the amount of income tax collected for each county in the
state, and shall designate the several general classes of property
from which the incomes were received, the cost to the state and
each county for the administration of the law, and all such facts
as shall be required to give a definite understanding of the finan-
cial operations of the law.
Income tax of individuals to be computed by assessor of
incomes and county clerk.
Section 1087m- — 21. The tax upon the income of persons
other than corporations, joint stock companies and associations
shall be computed by the county clerk, assisted by the assessor
of incomes and said clerk shall on or before November first, cer-
tify to each town, city and village clerk the names of all persons
whose incomes are assessed in his own town, city or village, and
the amount of tax levied against each such person, and such
amount shall be entered by the town, city and village clerks in a
separate column designated “income tax” upon the tax roll of
the year, and shall be collected and paid as personal property
taxes are now collected and paid.
Where tax shall be assessed, levied and collected.
Section 1087m — 22. The place at which the income tax here-
in provided for shall be assessed, levied and collected shall be
determined as follows:
1. In their return for purposes of assessment persons deriv-
ing incomes from within and without the state, Or from more
than one political subdivision of the state, shall make a separate
accounting of the income derived from without the state and
38
The Wisconsin Income Tax Law.
from each political subdivision of the state in such form and
manner as the tax commission may prescribe.
In dividing income between Wisconsin and other states the
process described under section 1087m — 2. 3. (pages 10, 11, 12)
should be followed. The distribution along political subdivi-
sions of this state may be made in proportion to gross income,
Investment, or preferably by an exact allocation of net income if
possible.
Assessment of income derived from different localities.
Section 1087m — 22. 2. The entire taxable income of every
person deriving income from within and without the state or
from within different political subdivisions of the state, when
such person resides within the state, shall be combined and ag-
gregated for the purpose of determining the proper exemptions
and proper rate of taxation. The taxable income so computed
shall be assessed, and taxes at such rate shall be paid, in the sev-
eral towns, cities and villages in proportion to the respective
amounts of income derived from each, counting that part of the
income derived from without the state when taxable as having
been derived from the town, city or village in which said person
resides.
Income of nonresidents; where assessed.
Section 1087m — 22. 3. Income derived by nonresidents of
the state from sources within the state or within its jurisdiction,
shall be separately assessed and taxed in the . town, city or vil-
lage from which such income is derived, at a rate determined by
the total income derived, from within any single town, city or
village.
! y r; r; \ t *■; fi rw w rw :^:j; w
General laws as to personal property taxes applicable.
Section 1087m — 22. 4. All laws not in conflict with the
provisions of this act, relating to the assessment, collection and
payment of taxes on personal property, the correction of errors
in assessment and tax rolls, the compromise or cancellation of
illegal taxes and the refund of moneys paid thereon, shall be
applicable to the income tax herein provided for ; but no town
or village board or common council, nor the county officers spe-
cified in section 1210g, shall compromise or cancel any income
tax or any part thereof or refund any moneys paid thereon with-
out the written approval of the assessor of incomes who made
the assessment or of the tax commission in the case of assess-
ments made by it, specifying the defect in the assessment or tax
proceeding and the amount of taxable income which should have
been assessed and the amount of the taxes justly chargeable
thereto. (1913 c. 27.)
The Wisconsin Income Tax Law.
30
The foregoing section makes the statutory provisions relating to
the manner of assessing and collecting personal property taxes
applicable to the income tax where no express provision to the
contrary is made. It also permits the correction of errors in
assessment and tax rolls by town, city and village clerks and
treasurers in the manner and to the extent prescribed by sections
1065, 1085 and 1085a of the Statutes, and provides for the re-
covery of income taxes unlawfully levied and collected with the
written approval of the person or board which made the assess-
ment, in the manner prescribed by section 1164 of the Statutes
as amended by chapter 478 of the Laws of 1913.
Delinquent income taxes.
Section 1087m — 22. 6. In the return of delinquent income
taxes as required by law the entire amount of each such delin-
quent income tax shall be returned to the county treasurer with-
out division or apportionment. All laws, including the provi-
sions of any city charter in conflict with this subsection, are
hereby repealed. (1913 c. 720.)
This provision was designed to secure a uniform practice in
the collection of delinquent income taxes. Certain cities oper-
ating under special charter, notably Milwaukee, have followed
the practice of returning delinquent state and county taxes only
and retaining the city tax for collection through the police de-
partment. The practice has led to confusion, particularly in
the application of the offset provision of the income tax and
may interfere with the collection of revenue. This section is* in
conformity with section 1114 of the Statutes.
Apportionment of income tax.
Section 1087m — 23. The revenue derived from such income
tax shall be divided as follows, to wit: Ten per cent to the
state, twenty per cent to the county and seventy per cent to the
town, city or village in which the tax was assessed, levied and
collected, which shall be remitted and accounted for in the same
manner as the state and county taxes collected from property
are remitted and paid.
Secrecy required as to contents of returns, etc.
Section 1087m — 24. 1. No commissioner, assessor of in-
comes, deputy, member of a county board of review, or any
other officer, agent, clerk or employe shall divulge or make
known to any person in any manner except as provided by law
any information whatsoever obtained directly or indirectly by
46
The Wisconsin Income Tax Law.
him in the discharge of his duties or permit any income return
or copy thereof or any paper or book so obtained to be seen or
examined by any person except as provided by law.
Penalties on officials for violating secrecy of returns.
2. Any officer, agent, clerk or employe violating any of the
provisions of this section shall upon conviction thereof be pun-
ished by fine of not less than one hundred dollars nor more than
five hundred dollars, or by imprisonment in the county jail for
not less than one month nor more than six months, or by impris-
onment in the slate prison for not more than two years, at the
discretion of the court.
3. Such officer, agent, clerk or employe upon such conviction
shall also forfeit his office or employment and shall be incapable
of holding any public office in this state for a period of three
years thereafter.
Tax commission authorized to make certain records public.
4. Nothing herein shall be construed as preventing the assess-
ment roll, the tax roll and all proceedings had before the county
board of review and all evidence taken at such hearing from be-
ing open to public inspection at such times and under such con-
ditions as the state tax commission may direct.
City and village officers are required to estimate the amount
of money required to be raised by taxation in their respective
districts in the month of October in each year. In doing so,
they must consider the revenues available from all sources, in-
cluding the income tax. When the assessment of income is com-
pleted, the names of the parties subject thereto with the amount
of their taxable income and income tax are required to be ex-
tended on the property tax roll and collected by the local treas-
urer. Under the property tax the assessment and tax rolls have
always been treated as public records subject to examination by
any person having occasion to consult the same. In the light
of these circumstances and the letter of the foregoing statute, it
is believed that the legislature intended the income tax assess-
ment and tax rolls to be public records and the commission has
ruled accordingly. There is no such necessity for the publicity
of refurns and proceedings before the board of review and the
tax commission has accordingly forbidden assessors of income
and county clerks from publishing, disclosing or permitting the
examination of any return, exhibit, writing or proceeding in
their custody relating to the assessment of incomes. The tax
commission has therefore promulgated the following rule:
The Wisconsin Income Tax Law.
41
To County Clerks:
Whereas, the proper officers of the several villages ami cities
of the state are required by law during the month of October of
each year to estimate the amount of money necessary to defray
the expenses of their respective municipalities for the ensuing
year, and to levy a tax on the general property of such district
for that purpose and in so doing are required to take into con-
sideration the revenues available from all sources, including the
amount to be derived under the income tax law', and,
Whereas, the income tax law, provides that the assessment and
tax rolls and all proceedings and evidence taken before the
county board of review shall be open to public inspection, under
such conditions as the tax commission may direct ;
Now, Therefore, It is hereby ordered and directed that all as-
sessment rolls, completed by the assessor and board of review
and .filed in your office, and all tax rolls as soon as convenient,
be treated as public records, open to the inspection of persons
having occasion to consult the same, to the same extent and in
the same manner and under the same restrictions, as other pub-
lic records in your custody. You are further directed not to
make public or permit the examination of any return, exhibit,
writing or proceeding in your possession or custody, relating to
the assessment of income taxes, except the assessment and tax
roll, hereinbefore referred to.
This rule to be considered permanent until revoked or
amended by the tax commission.
Dated at the Capitol at Madison, AVisconsin, this 1st day of
October, 1913.
By order of Wisconsin Tax Commission.
A. J. Myrland, Secy.
Office of county supervisor of assessment abolished.
Section 1087m — 25. 1. On and after the first Monday in Jan-
ary, 1912, the office of county supervisor of assessment is hereby
abolished.
Assessor of incomes to perform duties of supervisors of
assessment.
2. The assessor of incomes shall on and after the first Mon-
day of January, 1912, in addition to the duties and powers here-
in imposed and conferred upon him, perform all the duties and
possess all the powers heretofore imposed and conferred by law
upon the said county supervisor of assessment. The assessor
42 The Wisconsin Income Tax Law.
of incomes shall be under the direction and control of the state
tax commission, and shall make such reports to the commission,
to the county board of review and the county board of super-
visors, and perform such other duties as the commission shall
direct.
The powers and duties of assessors of income outside of those
relating to the income tax law are fully set forth in section 1087b
of the Statutes, which are printed as Part III of this pamphlet.
Personal property tax receipts may be offset against income
tax — when.
Section 1087m — 26. Any person who shall have paid a tax
assessed upon his personal property during any year shall be
permitted to present the receipt therefor to the tax collector,
together with any similar receipts for personal property taxes
paid by members of his family whose incomes have been assessed
to him, and have the same accepted by the tax collector to their
full amount in the payment of income taxes assessed against such
person during said year ; provided, that no receipt for taxes paid
on the shares of stock in any state, national or mutual savings
bank or trust company shall be allowed as an offset against any
income tax within the meaning of this section. ( 1913 c. 615.)
Income taxes are placed on the same tax roll as real and per-
sonal property taxes, and are payable at the same place and time
as these, namely, at the office of the local treasurers^ and any
time after the third Monday in December. All taxes not paid
on or before January 31st are subject to two per cent penalty.
The right of personal property “ offset” is confined to the per-
son or concern that owns the personal property assessed and is
chargeable with both the personal property tax and the income
tax, except that an individual may use the receipt for personal
property taxes paid by members of his family as an “offset”
against his income tax when his return includes income received
by such members of his family.
The right of personal property “offset” is also limited to per-
sonal property taxes appearing upon the same year’s tax roll as
the income tax.
Furthermore the “offset” is limited to personal property
taxes paid in the state of Wisconsin on other property than the
stock of any state, national or mutual savings bank or trust com-
pany.
Persons and corporations having personal tax offsets in more
than one taxing district will be governed by the following rules.
The Wisconsin Income Tax Imw.
43
OFFSET OF INCOME TAX BY PERSONAL
PROPERTY TAX.
Directions to Wisconsin Taxpayers.
When the income tax and the personal property tax are both
assessed in the same district and the taxpayer is not assessed for
income tax in any other district, the taxpayer will simply pay
the larger tax and obtain two receipts, one for personal prop-
erty and one for income tax.
If the taxpayer wishes to use a personal tax receipt issued in
one district to offset income tax assessed in another district, the
following procedure should be observed :
1. Secure a separate personal property tax receipt and have
the treasurer endorse on it the amount used to offset income tax
in that district.
2. Present or mail this personal tax receipt to the Assessor of
Incomes of the county in which it was issued and apply for Spe-
cial Offset Receipts covering the balance of personal property
tax. In Milwaukee city apply first to Income Tax Teller, City
Treasurer’s Office.
3. This application should state the amount desired for offset
in each other district in which the taxpayer has income tax to
pay, giving the correct name of such district and the county in
which situated.
4. Offset receipts for balance of personal property tax will
be issued with coupons, which coupons will be accepted only for
the amount entered upon them and in the district for which they
are issued.
5. The taxpayer should pay his personal property taxes in
time to secure special coupon receipts from the Assessor of In-
comes and forward them to the local treasurer against whom
they are issued. Penalties are imposed if the taxes are not paid
on or before January 31.
6. Ordinary personal property tax receipts will not be re-
ceived in offset in districts other than that in which issued.
7. The exact name is important. For instance, a firm cannot
use its personal property tax receipt to offset the income tax of
its members.
44
The Wisconsin Income Tax Law.
8. It is a common practice to write a personal property tax re-
ceipt at the bottom of the real estate receipt. Taxpayers should
therefore request a separate personal tax receipt whenever they
wish to use the latter to secure the special offset receipts men-
tioned above.
Assessment and collection of taxes for 1911 not affected by’
income tax law.
Section 1087m — 27. Nothing contained in this act shall be
construed to affect the assessment or collection of taxes assessed
in the year 1911 or prior thereto, under present laws, nor to
limit the power of assessors and boards of review relative to
correcting assessment rolls, placing omitted property thereon,
and reassessing property whenever such correction, insertion of
omitted property, or reassessment might be made under the laws
as they now exist.
Tax commission may make rules and regulations.
Section 1087m — 28. The state tax commission is hereby em-
powered to make such rules and regulations as it shall deem
necessary in order to carry out the foregoing provisions.
Tax commission may employ clerks and specialists.
Section 1087m — 29. The state tax commission is hereby au-
thorized to employ such clerks and specialists as are necessary
to carry into effective operation this act.
The Wisconsin Income Tax Law.
45
PART III.
DUTIES OF ASSESSORS OF INCOMES IN CONNECTION
WITH GENERAL PROPERTY TAXATION.
Section 3. Sections 772d, 772e, 772f, 772g, 772h, 772i and
772j of the statutes are renumbered, revised and amended to
read: Section 1087b. (1) The assessor of incomes shall have
full and complete supervision and direction of the work of the
town, city and village assessors of the county or counties within
his assessment district and shall annually, on or before the last
Tuesday of April, call a meeting for each such county of all
such local assessors for conference and instruction relative to
their duties in the valuation and assessment of all property sub-
ject to taxation. Each such local assessor, upon notice by mail
from said assessor of incomes s'hall attend such meeting and shall
receive therefor the sum of three dollars, and also six cents per
mile for travel from his residence to the county seat and return-
ing. Such compensation shall be paid out of the treasury of the
county in which such local assessor resides upon the certificate
of the assessor of incomes showing such attendance and travel,
in like manner as certificates of witnesses and jurors are paid.
(2) The assessor of incomes shall have access to all public
records, books, papers and offices throughout his district and
shall make a full and complete examination of them and investi-
gate all other matters and subjects relative to the assessment and
taxation of property in the several towns, villages and cities con-
tained therein; and for that purpose he shall visit each such
town, village and city as often as may be necessary during each
year.
(3) The assessor of incomes shall examine and test the work of
assessors during the progress of their assessments and ascertain
whether any of them is assessing property at other than full
value or is omitting property subject to taxation from the roll.
He shall have the rights and powers of a local assessor for the
examination of persons and property and for the discovery of
property subject to taxation, and shall have the power to per-
sonally value and reassess any property previously assessed by the
local assessor. If he shall ascertain that any property has been
omitted or not assessed according to law, he shall bring the same
to the attention of the local assessor of the proper district and if
such local assessor shall neglect or refuse to correct the assess-
4$ The Wisconsin Income Tax Law.
ment he shall report the fact in writing to the clerk of the proper
hoard of review at or before the meeting of such hoard and such
clerk shall lay the same before said board of review for its ac-
tion.
(4) Whenever the assessor of incomes ascertains, or has good
reason to believe, that any assessor is guilty of a violation of law,
he is authorized to make complaint to the presiding judge of the
circuit court for the removal of such assessor. The district at-
torney shall attend and prosecute such proceedings for removal.
(5) The assessor of incomes shall make a report to the county
board of each county within his assessment district showing in
detail the work of local assesors in their several districts, the
failure, if any, of such assessors or property owners to comply
with the law, the relative assessed and true value of property in
each local assessment district, and all such information and sta-
tistics as he may obtain which will be of assistance to the county
board in determining the relative value of all taxable property
in each town, city and village in the county. Such report shall
be filed with the county clerk at least fifteen days before the an-
nual meeting of the county board. The county clerk shall cause
to be printed not less than two hundred copies of such report,
one of which shall be mailed immediately by the county clerk
to each member of the county board. Not less than six copies
of such printed report, together with all statistics accompanying
the same, shall be filed with the state tax commission.
(6) The county board, upon its own motion, may direct the
assessor of incomes to make a reassessment of all the taxable
property in any local assessment district for any year, and to
report the same in the form of an assessment roll to the county
board at its next annual session. In making such reassessment,
the value of the property shall be fixed, as nearly as may be, as
of the time the original assessment was made, and he shall have
the powers and be governed by the rules provided by law for
local assessors in the assessment of property for taxation. In
case the aggregate valuation of taxable property as determined
by such reassessment, shall be ten per cent or more in excess of
the aggregate valuation thereof as fixed by the original assess-
ment, the expense of making such reassessment, not exceeding
five dollars per day for each day necessarily and actually spent
in making the same, shall be charged to such local assessment
district in the next apportionment thereto of county taxes.
(7) The state tax commission shall call a meeting of the as-
sessors of incomes at the capitol at a specified time in the month
of January in each year, for a conference on the subjects of tax-
ation and the administration of the laws, and for the instruction
of such officers in their duties. The actual and necessary ex-
penses of each such officer in such attendance shall be audited
and paid out of the state treasury in the same manner as other
expenses of said assessors are audited and paid. (1913 c. 443.)
The Wisconsin Income Tax Law.
47
INSTRUCTIONS TO INDIVIDUALS.
1. The return must be made to the assessor of incomes,
whether you have any taxable income or not, on or
before the date given on the blank form accompany-
ing these instructions. If no return is received on
or before the date designated, an assessment will be
made by the assessor of incomes and the taxpayer
renders himself liable to the penalties provided in
section 1087m — 12.3.
2. Every question should be answered. If there is no amount
or information to be given opposite a question, write
“none.”
3. Separate forms have been prepared as enumerated below.
If you need a different form write to the assessor of
incomes. All corporations should make their returns
to the Wisconsin Tax Commission directly on form
No. 4. The forms are :
Form Number 1. Individuals.
Form Number 2. Guardians, trustees, executors, ad-
ministrators, agents, receivers (with special instruc-
tions).
Form Number 3. Firms and copartnerships.
Form Number 4. Corporations.
Form Number 11. Farmers, dairymen, etc.
Form Number 21. Wage earners, salaried men, and other
individuals whose principal income is derived from
personal service.
4. Income received by the wife and each child under eighteen
years of age residing with the taxpayer as members
of his family must be separately stated on the return.
5. Articles taken from the stock of grocers and other mer-
chants for family consumption must, be accounted for
as income, inasmuch as the cost thereof is deducted
under the head of expenses of the business.
48
The Wisconsin Income Tax Law.
6. Exemptions: An- individual is entitled to an exemption
of $‘800; husband and wife $1200; for each child un-
der eighteen years of age $200; for each additional
person “actually supported by and entirely depend
ent upon the taxpayer for his support” $200. This
does not exempt children over eighteen years of age
in normal health although supported by the parents
at home, at school or elsewhere.
7. Profits from purchase and sale of real estate, stocks,
bonds and capital assets should be returned in answer
to the appropriate question. If such property was
acquired before the income tax took effe.ct, January
1, 1911, “ only such proportion shall be taxable as the
time between January 1, 191T, and the date of sale
bears to the entire time between the date of acqui-
sition and the date of sale.” If any deduction is
claimed on this account, accompany the return with
an explanatory statement specifying the character of
the property, date of purchase, amount paid, date of
sale and the amount received.
“Profits” here represent the excess of the selling price
over the total cost of buying and holding the prop-
erty, including interest actually paid (but not esti-
mated or constructive interest), and other necessary
expenses of holding and carrying the property, pro-
vided such expenses have not already been deducted
in the income tax returns for 1911 and 1912, or are
not elsewhere deducted in the present return.
8. Wages: This deduction is limited by law to “payments
made within the year for wr.ages of employees and a
reasonable allowance for services of copartners or
members of a firm actually rendered in producing
such income.” No deduction is allowed for wages
paid to household servants or to the wife or minor
children of a taxpayer or to the taxpayer himself.
If such amounts were deductible they would simply
have to be reported again as taxable income.
9. Firms and copartnerships may treat as deductible expenses
reasonable salaries paid to partners, provided the
amount paid to each partner is separately stated in
the return.
The Wisconsin Income Tax Law.
40
10. Repairs. Additions or improvements which increase the
selling value of property beyond its value on January
1, 1913, are not repairs and cannot be deducted. De-
terioration-which took place before January 1, 1913,
was properly covered by depreciation charged off in
previous years, and cannot be used to justify exces-
sive repairs in 1913.
11. Depreciation: The law limits this deduction to “a rea-
sonable allowance for depreciation by use, wear and
tear of the property from which the income is de-
rived, and in the case of mines and quarries an allow-
ance for depletion of ores and other natural deposits
on the basis of their actual original cost in cash or
the equivalent of cash.” Mere fluctuation in the
value of stocks, bonds and other property cannot be
deducted as depreciation.
12. Losses, depreciation and miscellaneous expenses cannot be
considered unless fully explained as called for in the
return.
13. Taxes: Income taxes paid in 1913 may be deducted if
separately stated on the blank. This deduction should
cover only the cash paid, not including the personal
tax offset.
14. Insurance: Insurance premiums actually paid during the
year on property from which taxable income is de-
rived may be deducted, but amounts paid for life,
sickness or accident insurance are not deductible.
15. Personality offset: Personal property tax receipts, to-
gether with similar receipts for personal property
taxes paid by members of the family whose incomes
are included in the assessment, count as cash in the
payment of the income tax ; but this offset is taken
care of at the time of payment and not during the
assessment season.
16. Farmers: (a) The value of farm products consumed by
the family must be included as gross income.
(b) Money spent for new fences, new buildings and other per-
manent improvements which increase the value of the
farm cannot be deducted as expenses.
&0 ^3 Phe Wisconsin Income Tax Law.
(c) The cost of fattening cattle may not be specially deducted
in computing the profit when such cattle are sold.
Such costs are taken care of properly when the costs
of feed and seed, hired labor, etc., are deducted.
(d) Share rent may not be deducted. Full allowance is made
for share rent when the costs of raising the produce
(wages and other cash expenditures) are deducted.
(e) Estimated losses — such as failure to realize expected
profits through drought, low prices, etc. — cannot be
deducted. Full allowance is made on this account
when the costs of labor, etc., are deducted.
17. Doctors, lawyers and professional men will report their .
fees or earnings when collected.
18. Merchants, manufacturers and business men generally will
report sales on account or for credit as gross income
of the year when the sales are made.
19. Bookkeeping: The purpose of the law is to ascertain the
taxable net income. Any method of bookkeeping
which fairly attains this result is acceptable.
INSTRUCTIONS TO CORPORATIONS.
1. Making returns :
(a) Section 1087m — 10.3 requires every corporation to
make a return “whether taxable under this act or
not. 9 *
(b) The fact that a corporation did no business or received
no income during the year 1913 does not relieve it
from making a return.
(c) Every question should be answered. If there is no
amount or information to be given opposite a ques-
tion write in the word “none.”
(d) Two returns are sent to each corporation so that copy
'can be retained for reference. Do not send dupli-
cates.
2. Assets, indebtedness and liabilities: This information is
required in order properly to check the deduction for
interest, which by Chapter 720, Laws of 1913, is now
limited to interest paid on “bonded or other indebted-
ness to an amount of such indebtedness not exceeding
The Wisconsin Income Tax LaW,
51
)
its [the corporation 'sj capital stock outstanding at
the close of the year; provided that the amount of
such capital stock shall in no case exceed the clear
value of its assets over and above all indebtedness
and liabilities. ” The method of taxing interest paid
upon bonds (practically) to the corporations issuing
such bonds, incorporated in the original income tax
act, has by Chapter 720, Laws of 1913, been repealed.
3. Gross income from operation of business: Gross sales dur-
ing the year 1913, whether for cash or on account,
should be reported under this head — and not gross
profits as in the federal corporation tax returns.
4. Profits derived from the occasional sale of real estate and
other capital assets not customarily held for sale in
the regular line of business should be reported under
question 8. The so-called “three year rule” has been
replaced by the provision that ‘ ‘ of the profits derived
from the sale of real estate or other capital assets
acquired previous to January 1, 1911, only such pro-
portion shall be taxable as the time between January,
1911, and the date of sale, bears to the entire time
between the date of acquisition and the date of sale.”
If any deduction is claimed on this account, accom-
pany the return with an explanatory statement spec-
ifying the character of the property and the date of
purchase, amount paid, date of sale, and the amount
received. “Profits” here represents the excess of the
selling price over the total cost of buying and holding
the property, including interest actually paid (but
not estimated or constructive interest) and other nec-
essary expenses of holding and carrying the property,
provided such expenses have not already been de-
ducted in the income tax returns for former years,
or are not elsewhere deducted in the present return.
In the case of the sale of a machine or other similar
property, the profit or loss should be measured as the
difference between the depreciated value and the sale
price, inasmuch as part of the value has been already
recovered by the charge for depreciation.
52
The Wisconsin Income Tax Law.
5. Companies dealing regularly in real estate are not affected
by the prorating process quoted in the preceding rule,
but should report profits on all sales. Companies
selling on the “instalment plan” may report on the
basis of actual collections treating as profit a share of
the cash collected based on the paper profit repre-
sented in the original sale. Thus if property costing
$200 is sold for $300, to be paid in three annual in-
stallments of $100 each, the company would report
$33.33 profit each year. Real estate companies can-
not deduct interest or taxes paid on unproductive
property. Such disbursements are chargeable as in-
vestment or carrying charges to the real estate itself,
and should be deducted as part of the cost when the
property is sold, to the extent that they have not
.already been deducted in the income tax returns for
previous years or elsewhere in the present return.
6. Inventories should in all cases be given in answer to ques-
tions 17 and 18. Where the accounting methods of
the corporation make it obviously incorrect to add
and subtract annual inventories, this fact should be
indicated by entering the inventories in red ink or
enclosing them in brackets.
7. Materials and wages : If the separation of labor cost from
cost of materials and goods as called for in questions
24 and 25, involves considerable clerical labor, the two
items may be merged and brief explanatory state-
ment given.
8. Losses and depreciation cannot be considered unless
treated as such on the books of the corporation and
fully explained as called for in the return.
9. Repairs: Replacements of machines or renewals of entire
units of plant are properly cared for by depreciation
and must not be deducted as repairs.
10. Taxes: State and Federal Income Taxes paid during 1913
may be deducted provided they are separately stated
in answer to question 30. The deduction for state
income tax should cover only the cash paid, and
should not include the personal property tax offset.
Special assessments are not deductible, as taxes or
The Wisconsin Income Tax Law. 53
otherwise, as they are in law betterments increasing
the value of the property by at least their amount.
11. Banks and trust companies, by the provisions of Chapter
615, Laws of 1913, are exempt from the income tax.
All such companies, however, must report on Blank
Form No. 9 the names and addresses of all officers
and employees to whom compensation of more than
$700 was paid in 1913.
12. Personal property tax offset: The personal property tax
counts as cash in the payment of income tax, but this
offset is taken care of at the time of payment and not
during the assessment season. Corporations having
income and personal property taxes to pay in more
than one municipality, may secure special instruc-
tions upon application to the Tax Commission.
13. Rate of taxation: The method of computing the rate of
taxation has by Chapter 720, Laws of 1913, been
changed and now conforms to the following schedule :
TAX RATES UPON THE INCOME OF CORPORATIONS.
On the first $1,000 of taxable income or any part thereof
2%.
On the second $1,000 of taxable income or any part thereof
On the third $1,000 of taxable income or any part thereof
3%.
On the fourth $1,000 of taxable income or any part thereof
3 y2%.
On the fifth $1,000 of taxable income or any part thereof
On the sixth $1,000 of taxable income or any part thereof
5%.
On all taxable income in excess of $6,000 6%.
14. Foreign corporations wrill report exactly as domestic cor-
porations engaged in business within and without the
state, although foreign corporations are not subject
to taxation upon income derived from land contracts,
mortgages, stocks, bonds and securities. Interest apd
54
The Wisconsin Income Tax Law.
discounts received in connection with the regular bus-
iness of a foreign corporation are, however, subject to
taxation upon the amount properly assignable or ap-
portionable to the state of Wisconsin.
15. Corporations engaged in business within and without the
state :
(a) To be “ engaged in business without the state” a do-
mestic corporation must maintain a definitely organ-
ized branch establishment outside of Wisconsin. The
mere sale of goods or products without the state; re-
gardless of the terms of the shipping contract, does
not bring the seller within the class of those “en-
gaged in business without the state.” The converse
of this rule applies to foreign corporations.
(b) In the case of domestic corporations the first and
simplest test is whether such company has taken out
a license to do business in any other state. In doubt-
ful cases corporations should explain whether they
have stores of goods and products subject to local
taxation in other states and give any other data cal-
culated to establish the fact of a business residence
without the state of Wisconsin. (See Question 39 A.)
(c) Non-apportionable income consists of rentals, royalties
and gains or profits from the operation of any farm,
mine or quarry which follow the situs of the property
from which derived, and income from personal serv-
ice, land contracts, piortgages, stocks, bonds and se-
curities which follows the residence of the recipient.
(d) Income other than that enumerated in the preceding
paragraph is apportionable. The share of apportion-
able income assignable to Wisconsin depends upon the
relation between the property and gross business in
Wisconsin and the total property and gross business.
“Property” in this use is confined to property yield-
ing apportionable income. Property yielding non-ap-
portionable income should not for obvious reasons be
employed to divide apportionable income. Question
39 -F as printed on the original blank contains a typo-
The Wisconsin Income Tax Law.
graphical error and is open to misconstruction. This
question should read: “39-F. Full or book value on
December 31, 1913 of property other than and exclud
mg land contracts, mortgages, stocks, bond3 and se-
curities, farms, mines, quarries and property yielding
rentals. ’ ’
(e) “Gross Business.” Gross business in the case of man-
ufacturing concerns is composed of two elements : the
business of production or manufacture and that of
sale. The first element is measured by the cost or
factory value of products manufactured during the
year ; the second element by the sales made during the
year minus the cost of such sales. The data for this
apportionment are called for in question 39-F to I.
(f) Mercantile corporations and construction companies
engaged in business within and without the state are
not subject to the apportionment process but will
make a separate accounting for income derived from
property located and business transacted within the
state of Wisconsin, accompanying the return with a
brief explanation of the manner in which overhead
and other general expenses have been prorated or
apportioned.
56
The Wisconsin Income Tax Law.
INSTRUCTIONS TO GUARDIANS.
Trustees, executors, administrators, agents or receivers.
1. The return is to be made to the assessor of incomes of the
district in which the representative has his official
residence.
2. With respect to place of assessment and taxation income is
of two classes: that which follows the situs of the
property or place of business, and that which follows
the residence of the taxpayer. The first class is not
affected by the existence of a guardianship, trust,
etc., i. e., income derived from property located and
business transacted within the state is taxable whether
the residence of the representative or that of the
ward, beneficiary, etc., be within or without the state.
The second class, income which for the jmrpose of
taxation follows the residence of the taxpayer, in-
cludes income from personal service, from land con-
tracts, mortgages, stocks, bonds and securities. Such
income will be assessed and taxed at the official resi-
dence of the representative, which is generally held
to be the district in which the ward, decedent, etc.,
lived when the representative was appointed.
3. As a general rule the trustee of an estate under the juris-
diction of a Wisconsin court is taxable upon the in-
come of the estate, regardless of the residence of the
beneficiary and even though the trustee personally
lives without the state.
4. Return should be made not only of the income received by
the representative, but of all other income received by
the ward, beneficiary, deceased or incompetent person
during the year 1913. The italicized part of this rule
is not believed to apply to representatives (par-
ticularly agents and assignees) of residents of this
state who are competent to make return op their own
behalf.
The Wisconsin Income Tax Law.
57
5. Income received during 1913 is taxable to the representa-
tive whether such income has been distributed to the
beneficiaries or not.
6. If an executor or trustee reports and is assessed for the
entire income of an estate, the beneficiaries may eacli
deduct the amount received therefrom in making
their individual returns. Each beneficiary, however,
should report the amount received as income and
claim a corresponding deduction at the proper place
on the return.
7. Exemptions: The allowance of the personal exemption is
controlled by the status of the beneficiary. No ex-
emption can be claimed on behalf of a ward, benefici-
ary, etc., if the latter is a nonresident of the state or
if, being a resident, he is entitled to an exemption in
another capacity.
8. Agents reporting income in the form of rent should be
careful to state the location of the property and the
other facts called for in question 29, Form No. 1. In
answer to question 37 such agents should also state
separately (a) the amount paid as commissions on
rents, and (b) the expenditure for janitor service,
heat, water and light.
9. It is not believed that a guardian ad litem is required by
section 1087m — 10.5 to make return to income for his
ward.
10. The principal return must be made* on Form No. 1 ; the
report on the reverse side of this sheet is merely sup-
plementary. A separate return must be made for
each estate, trust, etc., which the respondent repre-
sents.
INDEX
Page
Accident, surety, etc., companies —
exempt from income tax 21
Additions and corrections —
assessor and board of review may make 35
of corporations 30
of individuals 30
Administrators —
see Guardians, trustees, etc.
Agent —
may not divulge contents of returns 39
penalty for divulging contents of returns 40
required to make return 29
Amendments —
see Income tax law.
Appeal —
by corporation, for hearing 34
by individual, for hearing 36
Apportionment and collection of tax — ,
corporations 37
Apportionment of income —
residents 10
nonresidents 10
Apportionment of income tax —
after collection 39
between different localities 38
Assessment districts —
list of i 26
Assessment of incomes —
from different localities 38
how changes made 35
when and by whom made 28
60
Index.
Assessment roll —
open to inspection
41
Assessors —
violation of law
46
Assessors of incomes —
annual meeting
annual report to tax commission
duties in connection with general property taxation. . . .
how appointed
how removed or transferred .
may appoint deputies and assistants
not to divulge returns
oath to be taken by f
penalty for unanswered questions
powers as to Correction and reassessment
powers of
requirements as to :
rooms furnished by county
salaries and expenses of
shall assess incomes of individuals
term of office . . . .
to act as supervisors of assessment .
to compute tax with county clerk
46
46
45
27
27
27
39
27
30
32
28
27
28
27
28
27
41
37
Bank stock —
how assessed 16
tax not to be used as offset 16. 42
Banks —
dividends exempted 16, 19
exempted from income tax 14
Benevolent associations —
required to report 28
when taxable 20
Board of review —
adjournments ....... : 35
appeal from, taken to tax commission 3 6
appointment and compensation 34
attendance of witnesses, etc 3 5
cannot divulge returns 39
date of meeting 35
duties of .35
may appoint stenographic reporter 34
may make additions and corrections 35
must give notice of changes in assessment 3 6
notice of meeting published 35
objections to assessment must be made before board. ... 35
penalty for divulging returns 39-
when and where shall meet 35
Bonded or other indebtedness —
amount of interest deductible 13,14
Index.
01
Bonds—
interest from included in Income X
interest from where assessed Id
irif&rest from United States
Business year —
may end when 7
Capital stock —
see Stock.
~ l
Child under 18 years—
Exemption for
income added tp that of parent
20
Clergymen—
pot exempt from income tax , . . . . .
Clerk or employe-
may not divulge contents of returns
i • i • i «. i 39
Clerks and specialists—
tax commission may employ
44
Clerks (of towns, cities and villages) —
shall enter income tax on rolls
38
Collection —
of income tax
37
Constitutionality —
Of tax of public officers’ salaries
9
Co-operative associations —
how assessed
21
Copartnership —
( see also Firm)
deduction of reasonable salaries authorized 17
defined 8
when may close annual accounts 7
Corporations —
acting in fiduciary capacity 29, 30
appeal by, for hearing 34
appointment and collection of tax 37
by whom assessed 28
defined 8
depreciation allowed 13
dividends of ; 15
62
Index.
Corporations — Continued
foreign, deductions for 17,
interest on bonds, of
limitation of interest 13,
losses allowed
may be reassessed for three years . .
must furnish list of employes
penalties on, for false returns, etc. . .
penalties on officers for false returns
rates of tax upon 23,
report of stockholders 15,
returns by
statement of employes by exempt corporations
taxes of, computed by tax commission
wages and salaries paid "K
Corrections and additions —
to returns of corporations
to returns of individuals
County board —
may order reassessment
shall furnish rooms for assessor of incomes
County clerk —
duties in connection with board of review
penalty on for divulging returns
shall compute and certify income tax
County supervisor of assessment —
see supervisors of assessment.
Debt-
interest on evidences of
Deductions —
allowed corporations
bank stock J
depreciation
dividends t
interest
losses
operating expenses
repairs when allowed
taxes
wages and salaries
allowed to individuals
depreciation
dividends 17,18,
for repairs on residence of property
inheritances
interest on indebtedness
insurance, cost for one year
life insurance
losses
18
14
14
15
31
13
31
32
25
16
28
29
37
13
30
32
46
28
34
39
37
8
16
13
15
13
15
13
14
15
13
17
19
9
i p
18
18
17
Index.
fii
Deductions — Continued
ordinary and necessary expenses 17
pensions (U. S. ) 18
taxes 9, 18
Delinquent income taxes —
how returned .80
collection of 39
Depreciation —
allowed on mines and quarries 13, 14, 17
how determined 14
Deputies and assistants —
cannot divulge contents of returns 30
how appointed 27
penalty on, for divulging returns 4 0
salaries and expenses of 27
Directions —
see Offset of income tax.
Districts —
see Assessment districts.
Dividends —
for what period reckoned 8
from stock included in income 8
of hanks 16
of corporations 15, 16
where taxed 0
Educational associations —
may be required to make reports 20
taxable, when 20
Electric light, heat and power companies —
not exempt from tax 21
Employes —
wages and salaries to be reported i . . . 13
Executors —
required to make returns 29
Exemptions —
of public funds 21
religious associations, income of . 20
state banks, income of 20
to corporations 13, 20
to individuals 20
to legal dependents, etc 20
to members of firms 19
to public service corporations 21
/■, ■ .
64 Index.
Express companies —
exempt from income tax 21
Extension of time —
may be allowed for filing return 31
Failure to make return —
by corporations 28, 29
by individuals 29
False or fraudulent returns—
by corporation, how treated 3 \
by individuals, how treated §3
Federal income tax law —
grants access to returns §
Fees^
included in income , g
Firms and copartnerships—
annual accounts closed, when 7
defined v 8
included in term “person*’ , §
may close annual accounts, when 7
not entitled to exemptions 28
salaries and wages deducted 17
Franchises —
royalties from 9
Freight line and equipment companies —
exempt from income tax 21
Gains —
included in income 9
•
General property —
duties of assessors of incomes 45
Gross business —
apportionment process ... 7 1 -
how measured H
includes what * 9
o . -
Guardians, trustees, etc. —
required to make returns 2 9
acting in fiduciary capacity 29, 30
Husband and wife—
- exemption to * t .» i i i v . u
Index.
65
Income —
how apportioned . . . . : 10
of banks 42
of corporations 23
of nonresidents 10
what included in •. . 8
where assessed 10
within and without the state 10
Income tax —
apportionment after collection 30
first year, 1911 7
of nonresidents, where assessed 33
when deducted 18
where assessed, levied and collected 37
Income tax law —
discussion of certain 1913 amendments
7, 9, 10, 11, 13, 14, 16,17, 19, 20
Indebtedness —
interest on 18
Individuals —
additions, corrections and reassessments of income. . 32*
assessed by assessors of incomes 28
deduction of interest on indebtedness 18
deductions for wages and salaries 17
dividends deducted 17
exemptions allowed 20
losses allowed . .. . 17
may appeal from board of review 36
penalties on 31, 32
pensions (U. S.) deducted 18
rates of tax 22,23
term used for natural persons 8
Inheritances —
deductible from income, when 18
Instructions —
to corporation 50'
to individuals ’ 47
to guardians 56
Insurance —
deduction of, when 9
Interest —
deductible by corporations 13, 14
depreciation allowed 13
from United States bonds 8
included in income 8
where taxed 9>
66
Index.
•/
Interest on indebtedness —
deduction allowed to individuals 18
percentage of capital stock allowed 14
Joint stock companies —
see Corporations.
Judicial officers —
see Public officers.
Land, contracts —
where assessed . . . , 10
Legally dependent —
term defined ! 19
Legally liable — »
see Legally dependent.
Life insurance —
when deducted 18
Life insurance companies —
exempt from income tax . 21
Losses —
bad accounts deducted, when 15
by corporations, deductible when 15
by individuals, deductible, when . . . .' 17
Merchants’ stock —
depreciation accounted for in inventories 14
Mines —
depreciation allowed . 13, 14, 17
royalties from 10, 11
, ■ •
Mortgages —
included in income . 8
interest from 10
Mutual savings or loan and building associations —
taxable, when v 21
Net income —
how computed 9
Net rental —
how estimated 9
Index.
67
Nonresidents —
apportionable income . 11
apportionment of income 10
exemption of income ♦ 20
for what assessed 10
not entitled to exemptions 20
interest from mortgages 10
where assessed 38
Notes —
interest on v 8
Objections —
to assessment, made before board of review 35
Officers of corporations —
penalties on for false returns, etc * 31
Offset of income tax —
by personal property tax 43
Ordinary and necessary expenses —
may be deducted from income 17
Pecuniary profit —
construed 20
§Ppl| , j
Penalty —
for violating secrecy of returns 40
on assessor for unanswered questions 30
on corporation for failure or refusal to make return. . 31
on corporation for false or fraudulent return . 31
on individuals for false or fraudulent return 32
on officers of corporations for false return 32
Pensions, U. S. —
deduction allowed individuals 18
Person —
defined 8
Personal property offset —
instructions by tax commission 43
on bank stock not allowed 16
used against income tax, when 42, 43
Profits—
derived from sale of real estate 9
derived from sale of stock, computed 9, 10
for what period reckoned 8
included in income 8
rule as to 3 year period changed 9
68
Index.
Public funds —
income of, exempt from tax 21
Public officers —
salaries of, taxed 6,9
Public records —
tax and assessment rolls open to inspection 40
Public service corporations —
statement of employes required 28
taxable when 21
Quarries —
depreciation allowed 13
Railroad companies —
exqmpt from tax 21
Rates —
applied to corporations 23,25
applied to individuals 22, 23
for corporations, doubled when 31
for individuals, doubled when 32, 33
Real estate —
rent of, included in income ! . . 8
three year rule repealed and replaced 9
Real estate companies —
excepted from general provisions of 1087m — 2 9, 10
Reassessment —
of income of corporations (for 3 years) 31
of individuals 32
Receivers —
required to make return 29
Religious associations —
income not taxable, when 20
Rentals —
where income from, assessed 10
Rent of real estate —
included in income , 8
Repairs —
when deductible 14
Residence —
occupied by owner
9
Index.
69
Residence property —
included in income . . : 8
Returns —
authority to use other than calendar year 7
of corporations
additions and corrections 30
extension of time 31
instructions 50-55
required whether blanks received or not 29
penalty for false or fraudulent 31
to whom made 16, 28
of individuals
additions and corrections 30
instructions 47-50
penalties for false returns 32
when and how made - 28
and copartnerships, to whom made 16
secrecy of 39
Royalties —
income from 10, 11
Rules and regulations —
may be made by tax commission 44
Salaries —
commission may disallow when not reasonable 13
deduction of, to copartners 17
included in income 8
of public officers 9
Scientific associations —
not taxable, when 20
Secrecy —
of returns : 39
Sleeping car companies —
exempt from ipcome tax 21
Special assessments —
not considered as taxes 15
Stepchildren —
legal obligations to 19
Stock —
depreciation not allowed as such 14
dividends from 8
income of, how computed 8, 11
where assessed 10
70
Index.
Stockholders —
in banks, how taxed 16, 42:
Street railways, including connected electric light, heat
and power companies —
exempt from income tax 21.
. t
Surety companies —
see Accident, surety, etc. companies.
Supervisor of assessment —
office abolished 41
Taxable income —
defined 23, 24
from different localities 38
how computed 9
what included in 10
Tax commission —
authorized to make certain records public
call meeting of assessors of incomes
instructions as to offset of income tax
may appoint assessors . . . . *
' may authorize appointment of deputies and assistants
may disallow excessive salaries
may double rate of corporations
may double rate of individuals
may employ clerks and specialists
may extend time for corporations
may fix period of accounting
may fix period for making returns
may fix salaries of assessors
may make additions and corrections
may npt divulge returns
, may prescribe method of accounting
may prescribe penalty for failure to make return
may prescribe penalty on assessor for unanswered ques-
tions 7 ......... s . .
may reassess corporations
may secure rooms for assessor of incomes, v^hen
may transfer and remove assessors
powers of
shall assess corporations
shall review assessments on appeal
to make report of amount of income tax
40
46
42
27
27
13
44
31
8
28
27
30
30
10
29
30
31
28
27'
28
28
36
37
Taxes —
assessment and collection of, not affected by law of
1911 44
deduction allowed corporations 15,
deduction allowed individuals 18
proper deduction when 15*
Tax roll, see Assessment roll —
Index.
71
Telegraph companies —
exempt from income tax 21
Telephone companies —
exempt from income tax 21
Three year rule —
applied to profits from sale of real estate, changed. ... 9
Title guaranty companies —
exempt from income tax 21
Trust companies —
dividends deductible to stockholders 16, 19
Trustees, see Guardians, trustees, etc. —
United States pensions, see Pensions —
Wages —
deduction allowed to individuals 17
included in income 8
Within and without the state —
apportionment of income 10, 12
how income is determined 10
individuals, same ratio as allowed corporations 18
taxable income, how ratio computed -38
Wife-
income of, added to that of husband 20
t